Microsoft delays Office release, again

MichaelPaige

LOS ANGELES (MarketWatch) -- Microsoft Corp. on Thursday announced another delay in the release of the next version of its Office suite of business software, postponing its launch based on internal testing and customer feedback.

Microsoft's
MSFT, +1.28%
push-back of Office 2007 until the end of the year for business customers and until "early" next year for consumers could also signal a further slip in the release of Vista, its newest operating system that also has already been delayed for consumers.

The Redmond, Wash., software giant now plans to release its latest Office package - widely used for things like word processing and managing spreadsheet and e-mails - to business customers by the end of the year and to consumers "early" next year. Microsoft already had delayed the consumer version of Office until January and said it would release the software to its large business customers in October, timing the rollout to match that of Vista. See archived story.

"Based on internal testing and beta 2 feedback around product performance, we are revising our development schedule to deliver the 2007 Microsoft Office system by the end of year 2006, with broad general availability in early 2007," the world's largest software company said in a statement.

"Feedback on quality and performance will ultimately determine the exact [launch] dates," it added.

Analyst Brent Thill at Citigroup said he now expects Microsoft to also delay Vista until late 2006 for the company's biggest business customers and late in the first quarter, or possibly into the second quarter, of next year for consumer users.

"The risk is that these persistent delays could indicate quality issues that may dissuade enterprises and consumers from becoming early adopters," he told clients.

Thill continues to rate the stock hold and said his financial model didn't include "dramatic" revenue impact from Vista for fiscal 2007, leading him to leave his estimates for the company unchanged.

In March, Microsoft said Vista, the next version of its Windows software that's used to power over 90% of the world's computers, wouldn't be available for consumers in time for the important holiday selling season.

Just days later, the company unveiled a far-reaching restructuring of the unit responsible for its flagship Windows software, giving an executive from its Office business responsibility for planning future versions. See archived story.

Shares were largely unmoved by the news in evening trading, easing 5 cents to change hands at $23.42. The stock closed the regular session up 1.3% at $23.74.

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